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SEC seeks hedge fund disclosure over links with public firms

The Securities and Exchange Commission, increasing its scrutiny of hedge funds and insider trading, is asking hedge fund advisers for information about relationships their investors and employees have with public companies.

Since May, the SEC has sent about two dozen letters to registered hedge fund advisers asking for new information as part of its routine examinations. It has sought lists of public companies where funds' employees, relatives, investors or clients serve as officers or directors.

In the 27-page letter, the SEC asks advisers to provide a record of client and other accounts that invested in Private Placement in Public Entity, which are privately negotiated stakes in publicly traded companies. For new PIPE deals, the US regulator is asking for the execution date the deal was agreed upon and the date the securities were received or sold. It is also requesting descriptions of finders, brokers or promoters involved in the PIPE deals.